I don’t tend to look at the motoring section of the Herald much however every now and then something stands out – often for its comedy value – and that was the case yesterday in an article titled Motoring Mythbusting. The article covers off a number of areas but two in particular deserve some attention. The first one talks about the cost of petrol.
It’s easy to see why petrol is a grudge purchase for so many people: you keep pouring the stuff into the tank and then it just disappears as you drive around. With the cost of filling a 50-litre tank currently at about $108, it’s a big drain on your wallet.
But think of the wonderful things that mobility and the private motor vehicle bring us: that sense of control, the freedom to be in different places as we choose. Failing that, remember that New Zealand still has the fifth-lowest fuel tax in the Western world. Petrol is actually cheaper than a 750ml bottle of Pump water from the supermarket ($3.99 per litre as this is written), despite having more complicated packaging and distribution demands.
Something else to consider for new-car buyers. If you have a humble Toyota Corolla GX, it will cost you $5600 per year to fill it up every week. Given that 55 per cent depreciation over three years is a realistic figure for a new car, it’s costing you $5800 just to have the thing in your driveway (that’s before you even consider finance or insurance). So petrol is not necessarily even the most expensive part of running a car.
Almost not quite sure where to begin so this is basically just a dump of my various thoughts about the comments above.
Paying over $100 to fill a tank on a regular basis might not be a big burden for the author but for many households it is a significant cost and it’s a cost that’s been rising with the price now sitting firmly over $2 per litre. The impact of the rises in fuel price are being reflected the spending from peoples wallets. The Electronic Card Transaction data from Stats NZ shows that over the last 11 years the percentage we’ve spent on fuel compared to other retail activities has gone from 10.5% to 16.5%.
For families on low incomes the percentage of their income spent on private vehicles is likely to be even higher which leaves them with less money to spend on other things, like food. But more often than not it’s not just about filling one car but multiple ones. In the 2013 census 257,856 households in Auckland out of the 469,500 (55%) had two or more vehicles. In many cases families simply have no choice but to have multiple vehicles due to the dispersed nature of jobs in Auckland and lack of viable alternative options, all of which means higher household fuel costs.
The author then claims that petrol for a car isn’t really that much when you compare it to depreciation, insurance, licencing and other transport costs. Of course he compares the depreciation on a brand new car while many people buy cheaper second hand cars for which the amount of depreciation is less however it is an important point that the cost of fuel is just one part of the overall picture in owning a car. He’s also right that mobility and the ability to get to many places is a really important thing. I would suggest though that it isn’t just a car that can improve mobility and open up the places you can travel. A well designed PT network with frequent services and integrated fares can do that too. Combined with riding a bike or walking such a network can provide mobility options in the city and where PT priority exists can also do so free of congestion.
What’s more travelling on such a network can be comparatively quite cheap. For example a monthly pass covering the entire urban area is $190 a month or a maximum of $2300 per year. That’s less than half the cost of petrol mentioned in the article and combined with the abundant access the new network will provide will become ever more compelling for people. To me the huge benefit of the PT investment that’s happening or that we’re pushing for is not that it will force everyone out of cars but that it allows some people to reduce their level of car use. Perhaps a two car family will be able to go to a single car, or a three car family down to two cars.
The myth in the article that caught my attention was the last one.
The late LJK Setright was arguably the most erudite motoring journalist of his time. Not to mention often quite mischievous.
According to the great man in one of his 1990s columns: “Speed does not kill. Speed saves time, which is life.”
I wonder how long it will be before the government start using this line?
Yet as Peter pointed out the other day, many people don’t value speed and choose to pay for travel with time, does this mean they value their life less or just differently to a motoring journalist.